Vedanta to buy 51% stake in Zambian mine

Anil Agarwal-owned Vedanta Resource PLC, the offshore parent of Sterlite Industries, is acquiring 51 per cent controlling stake in Zambia-ba...

Anil Agarwal-owned Vedanta Resource PLC, the offshore parent of Sterlite Industries, is acquiring 51 per cent controlling stake in Zambia-based Konkola Copper Mines (KCM) for Rs 222 crore or $ 48.2 million.

The agreement is conditional on Zambia Copper Investments Ltd’s shareholders’ nod and is expected to be completed by October 2004. Out of the total cash consideration of $ 48.2 million, $ 27.3 million is payable on completion, it said adding, this would increase Vedanta’s exposure to copper production.

Vedanta, promoted by Agarwal who shifted his base from Mumbai to London, had recently floated a mega IPO and listed its share on the London Stock Exchange.

Vedanta will obtain operating, management and board control of KCM and will appoint the CEO and chairman. The acquisition is expected to enhance earnings in the first full year of ownership and provide opportunities to improve operational efficiency and increase returns. It said the acquisition is assessed on the basis of existing assets and reserves and without assuming any benefit from additional resources.

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